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Old July 11 2012, 12:41 AM   #1
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Default Noida/NE: Land Allotted by Authority in 10 Years Installments to Builders, Future Impact at Buyers ?

Dear All

I am getting lot of questions regarding noida authority 10 years payment plan for builders. Let me try to simplyfy this :

1. Noida authority started this in year 2009(with allottment of Mahagun Maple, Prateek Fedora, Gardenia Grace and Eden Park) and it was simple way to make group housing plots affordable for builders in Noida.
2. In this plan, builder was suppose to make 10% payment of allottment amount and after paying 1% as Lease Rent for 1 year, was eligible for making registry. So in this way, by having approx. 16% (10% allottment +1 % lease rent for first year+5% as registry) of total allottment cheque value,builder was owner of that land and could start selling project to individual.
3. This plan made life of builders were easy and anyone having money started playing on big plots because to have one 50000 sq meter project in Noida, assuming circle rate or Rs 20,200 needed just 16 cr in white to start selling project in Noida.
4. As builder were selling projects on flexi plan so even by just taking 10% as booking from customer, by selling 200-300 flats they were able to recover that white amount invested.
5. Noida authority gave 2 years only interest(that also on just 11%/annum, i.e cheaper than even car loan/personal loan) and after builder was suppose to pay total amount in next 8 years.

Now few catch in this scheme:

1. Noida authority clearly mentioned that if any builder is defaulter for 2 continous installments then authority can decclare that builder as defaulter.
2. Even authority is having provision to stop that project and take land back form builder.
3. If a builder is going for completion certificate then he has to pay full pending amount to authority to get NOC. now 2009 projects were small(maple, fedora, grace etc.) so paying money at the time of possession is not big deal but amazing making payment of just 50000 sq meter plot at the time of possession will be approx. 90 cr for any builder. Heard from few sources that registry of Omaxe grand woods is stopped because builder has not paid all dues till now. These types of cases will come at the time possession when builder will go for completion certificate

4. No where authority has mentioned that how they will secure the interest of individual customers if any builder is going to default in-between or at the time of possesion which is really very dangerous.

5. Now authority also gave sub-lease options for big plots but it is not mentioned that what if consortium head default but sub-lease person is paying at time or vice-versa

These are reasons that why SBI is not giving loan to any builder in Noida/Noida Ext because as per SBI rules, they give loan to builder flat only if 100% land cost is paid. As an exception they gave loan to Gaur city and that also only CLP because they did corporate deal with builder.

As buyers in Noida dont have any control on above factors so not much can be done except faith on builder so it is important to book flat only with builders who are financially very sound.

Thanks

 
Old July 11 2012, 08:13 AM   #2
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Default thanks for giving important info..

Quote:
Originally Posted by search2010 View Post
Dear All

I am getting lot of questions regarding noida authority 10 years payment plan for builders. Let me try to simplyfy this :

1. Noida authority started this in year 2009(with allottment of Mahagun Maple, Prateek Fedora, Gardenia Grace and Eden Park) and it was simple way to make group housing plots affordable for builders in Noida.
2. In this plan, builder was suppose to make 10% payment of allottment amount and after paying 1% as Lease Rent for 1 year, was eligible for making registry. So in this way, by having approx. 16% (10% allottment +1 % lease rent for first year+5% as registry) of total allottment cheque value,builder was owner of that land and could start selling project to individual.
3. This plan made life of builders were easy and anyone having money started playing on big plots because to have one 50000 sq meter project in Noida, assuming circle rate or Rs 20,200 needed just 16 cr in white to start selling project in Noida.
4. As builder were selling projects on flexi plan so even by just taking 10% as booking from customer, by selling 200-300 flats they were able to recover that white amount invested.
5. Noida authority gave 2 years only interest(that also on just 11%/annum, i.e cheaper than even car loan/personal loan) and after builder was suppose to pay total amount in next 8 years.

Now few catch in this scheme:

1. Noida authority clearly mentioned that if any builder is defaulter for 2 continous installments then authority can decclare that builder as defaulter.
2. Even authority is having provision to stop that project and take land back form builder.
3. If a builder is going for completion certificate then he has to pay full pending amount to authority to get NOC. now 2009 projects were small(maple, fedora, grace etc.) so paying money at the time of possession is not big deal but amazing making payment of just 50000 sq meter plot at the time of possession will be approx. 90 cr for any builder. Heard from few sources that registry of Omaxe grand woods is stopped because builder has not paid all dues till now. These types of cases will come at the time possession when builder will go for completion certificate

4. No where authority has mentioned that how they will secure the interest of individual customers if any builder is going to default in-between or at the time of possesion which is really very dangerous.

5. Now authority also gave sub-lease options for big plots but it is not mentioned that what if consortium head default but sub-lease person is paying at time or vice-versa

These are reasons that why SBI is not giving loan to any builder in Noida/Noida Ext because as per SBI rules, they give loan to builder flat only if 100% land cost is paid. As an exception they gave loan to Gaur city and that also only CLP because they did corporate deal with builder.

As buyers in Noida dont have any control on above factors so not much can be done except faith on builder so it is important to book flat only with builders who are financially very sound.

Thanks
this is seems to be very important source, i request modertor to make this thread sticky....

if above is the case this is the reason LB poss is due, as no bulder wannna loose the cream of payment if ur point number 3 is valid, but some one say 15% flat completion... need some more info...
if this is the case let me tell u 3c s the only builder right now u have the capacity to pay (if he wants? seems buying time over his reputation)..
this is very bad news for those project which are big by size and by small and cash crunch builders....

i think JP is out of this mess at least...

the above observation are based on limited knowledge..
request to make me correct, and all provide genuinine info for sharing to help other...
 
Old July 11 2012, 10:03 AM   #3
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Quote:
Originally Posted by search2010 View Post
Dear All

I am getting lot of questions regarding noida authority 10 years payment plan for builders. Let me try to simplyfy this :

1. Noida authority started this in year 2009(with allottment of Mahagun Maple, Prateek Fedora, Gardenia Grace and Eden Park) and it was simple way to make group housing plots affordable for builders in Noida.
2. In this plan, builder was suppose to make 10% payment of allottment amount and after paying 1% as Lease Rent for 1 year, was eligible for making registry. So in this way, by having approx. 16% (10% allottment +1 % lease rent for first year+5% as registry) of total allottment cheque value,builder was owner of that land and could start selling project to individual.
3. This plan made life of builders were easy and anyone having money started playing on big plots because to have one 50000 sq meter project in Noida, assuming circle rate or Rs 20,200 needed just 16 cr in white to start selling project in Noida.
4. As builder were selling projects on flexi plan so even by just taking 10% as booking from customer, by selling 200-300 flats they were able to recover that white amount invested.
5. Noida authority gave 2 years only interest(that also on just 11%/annum, i.e cheaper than even car loan/personal loan) and after builder was suppose to pay total amount in next 8 years.

Now few catch in this scheme:

1. Noida authority clearly mentioned that if any builder is defaulter for 2 continous installments then authority can decclare that builder as defaulter.
2. Even authority is having provision to stop that project and take land back form builder.
3. If a builder is going for completion certificate then he has to pay full pending amount to authority to get NOC. now 2009 projects were small(maple, fedora, grace etc.) so paying money at the time of possession is not big deal but amazing making payment of just 50000 sq meter plot at the time of possession will be approx. 90 cr for any builder. Heard from few sources that registry of Omaxe grand woods is stopped because builder has not paid all dues till now. These types of cases will come at the time possession when builder will go for completion certificate

4. No where authority has mentioned that how they will secure the interest of individual customers if any builder is going to default in-between or at the time of possesion which is really very dangerous.

5. Now authority also gave sub-lease options for big plots but it is not mentioned that what if consortium head default but sub-lease person is paying at time or vice-versa

These are reasons that why SBI is not giving loan to any builder in Noida/Noida Ext because as per SBI rules, they give loan to builder flat only if 100% land cost is paid. As an exception they gave loan to Gaur city and that also only CLP because they did corporate deal with builder.

As buyers in Noida dont have any control on above factors so not much can be done except faith on builder so it is important to book flat only with builders who are financially very sound.

Thanks
+1. Good post. Just to add on onto this. What happened in 2009 was with BMW govt, which took almost 20-30% plot payment under the table, but also gifted land to some. now with the new govt, further payment needs to be made which is in line with the land holding of builders. and there is no way any gifts can be given now.
Thats the reason talks are flowing about prices going further up, circle rates increasing 20% etc.
planner likes this.
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Old July 11 2012, 10:41 AM   #4
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very nice post...this should be made sticky, very well explained.
I have read so many posts regarding the same but all lacked the information & seemed to be based on imagination.
 
Old July 11 2012, 11:34 AM   #5
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The following provisions are relevant to the discussion here:

O. EXECUTION OF SUB LEASE DEED

1. The Lessee shall have to fulfill the following conditions before the execution of
the sub lease of the flats/plots in favour of the individual allottees:

i. Lessee shall submit the temporary occupancy (completion)
certificate/ occupancy (completion) certificate of the constructed flats
on the allotted plot from the Building Cell of the Authority as
mentioned in clause-R of this document.
ii. Lessee shall submit No Dues Certificate in accordance with the
payment schedule specified in the Lease Deed from the Accounts
Department ( Residential) of the Authority.

2. The Lessee shall have to execute sub lease in favour of the individual allottees
for the developed flats/plots in the form and format as prescribed by the
Authority.

3. The Lessee as well as allottees shall have to follow the rules and regulations
prescribed in respect of leasehold properties and shall have to pay the charges
as per the rules of the Authority/Government of Uttar Pradesh, as applicable.

4. Every sale done by the Lessee shall have to be registered before the physical
possession of the property is handed over.

5. The allot tee/lessee shall submit list of individual allottees of Flats within 6
months from the date of obtaining occupancy certificate.


R. CONSTRUCTION

1. The lessee is required to submit building plan together with the master plan
showing the phases for execution of the project for approval within 6 months
from the date of possession and shall start construction within 12 months from
the date of possession. Date of execution of lease deed shall be treated as the
date of possession. The Lessee shall be required to complete the construction of
group housing pockets on allotted plot as per approved layout plan and get the
occupancy certificate issued from Building Cell Department of the Authority in
maximum 5 phases within a period of 7 years from the date of execution of
lease deed. The lessee shall be required to complete the construction of
minimum 15% of the total F.A.R. of the allotted plot as per approved layout
plan and get temporary occupancy/completion certificate of the first phase
accordingly issued from the building cell of the Authority within a period of
three years from the date of execution of lease deed.
In case of plotted development, the final purchaser/sub-lessee of plot shall
have to obtain completion certificate from the Authority within the period of 5
years from the date of execution of lease deed.


3. Without prejudice to the Authority’s right of cancellation, the extension of time
for the completion of Project, can be extended for a maximum period of
another three years only with penalty as under:


For first year the penalty shall be 4% of the total premium.


For second year the penalty shall be 5% of the total premium.


For third year the penalty shall be 6% of the total premium.
Extension for more than three years, normally will not be permitted.

4. In case the Lessee does not construct building within the time provided
including extension granted, if any, for above, the allotment/ lease deed as the
case may be, shall be liable to be cancelled. Lessee shall lose all rights to the
allotted land and buildings appurtenant thereto.

6. The allottee /lessee may implement the project in maximum five phases and
the occupancy certificate/completion certificate shall be issued by the authority
phase wise accordingly enabling them to do phase-wise marketing.


One thing is clear from the above that completion certificate in respect of a project will be issued phase-wise by the Authority, and for obtaining completion certificate of a particular phase, NOC for having no dues as per the schedule of payment is required. It may be noted that 'no dues' does not mean payment of whole premium: it means payments that have become due as per the schedule of payment as on the date of application for the completion certificate( for a particular phase). Therefore, as long as the builder does not default in paying prescribed installments, there is no issue. Issues arise only when builder defaults.

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Old July 11 2012, 12:20 PM   #6
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Quote:
Originally Posted by search2010 View Post
Dear All

I am getting lot of questions regarding noida authority 10 years payment plan for builders. Let me try to simplyfy this :

1. Noida authority started this in year 2009(with allottment of Mahagun Maple, Prateek Fedora, Gardenia Grace and Eden Park) and it was simple way to make group housing plots affordable for builders in Noida.
2. In this plan, builder was suppose to make 10% payment of allottment amount and after paying 1% as Lease Rent for 1 year, was eligible for making registry. So in this way, by having approx. 16% (10% allottment +1 % lease rent for first year+5% as registry) of total allottment cheque value,builder was owner of that land and could start selling project to individual.
3. This plan made life of builders were easy and anyone having money started playing on big plots because to have one 50000 sq meter project in Noida, assuming circle rate or Rs 20,200 needed just 16 cr in white to start selling project in Noida.
4. As builder were selling projects on flexi plan so even by just taking 10% as booking from customer, by selling 200-300 flats they were able to recover that white amount invested.
5. Noida authority gave 2 years only interest(that also on just 11%/annum, i.e cheaper than even car loan/personal loan) and after builder was suppose to pay total amount in next 8 years.

Now few catch in this scheme:

1. Noida authority clearly mentioned that if any builder is defaulter for 2 continous installments then authority can decclare that builder as defaulter.
2. Even authority is having provision to stop that project and take land back form builder.
3. If a builder is going for completion certificate then he has to pay full pending amount to authority to get NOC. now 2009 projects were small(maple, fedora, grace etc.) so paying money at the time of possession is not big deal but amazing making payment of just 50000 sq meter plot at the time of possession will be approx. 90 cr for any builder. Heard from few sources that registry of Omaxe grand woods is stopped because builder has not paid all dues till now. These types of cases will come at the time possession when builder will go for completion certificate

4. No where authority has mentioned that how they will secure the interest of individual customers if any builder is going to default in-between or at the time of possesion which is really very dangerous.

5. Now authority also gave sub-lease options for big plots but it is not mentioned that what if consortium head default but sub-lease person is paying at time or vice-versa

These are reasons that why SBI is not giving loan to any builder in Noida/Noida Ext because as per SBI rules, they give loan to builder flat only if 100% land cost is paid. As an exception they gave loan to Gaur city and that also only CLP because they did corporate deal with builder.

As buyers in Noida dont have any control on above factors so not much can be done except faith on builder so it is important to book flat only with builders who are financially very sound.

Thanks
In this scheme ONE MAIN RISK will always be there.........Builders defaulting on the EMI payment to authority will make the buyers property unauthorized .......... So if one buys a flat and want to resale it............then he wont be able to do it as the registry in the name of new buyer cannot happen.

For a First time house hunter, buying his first house for end use...........better avoid projects under this scheme.
 
Old July 11 2012, 12:56 PM   #7
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So that means, buyer may register flat even when full payment of plot is not done? what if builder defaults after completing the whole project? will the buyers (who has registered their flats and living in them) be asked to vacate the flats by authority? totally gray area...
 
Old July 11 2012, 01:53 PM   #8
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Quote:
Originally Posted by ghanup View Post
So that means, buyer may register flat even when full payment of plot is not done? what if builder defaults after completing the whole project? will the buyers (who has registered their flats and living in them) be asked to vacate the flats by authority? totally gray area...
Yes Suppose builder pays all the instalments upto the date when registry was done..........thereafter builder defaults............then this will make resale of this flat impossible because registry in name on new buyer cannot happen.


As regarding-
will the buyers (who has registered their flats and living in them) be asked to vacate the flats by authority?

I think only registry will stop, and authority may not ask the occupant to vacate. ......My POV......but I am not very sure........as you have pointed out ..... its a grey area.......the is no example before........as a complicated thing like 10 Year Land Payment Plan never before had happened in the history of RE.
 
Old July 11 2012, 04:51 PM   #9
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Quote:
Originally Posted by ghanup View Post
So that means, buyer may register flat even when full payment of plot is not done? what if builder defaults after completing the whole project? will the buyers (who has registered their flats and living in them) be asked to vacate the flats by authority? totally gray area...

If a builder is going for completion certificate then he has to pay full pending amount to authority to get NOC.

And buyer get the flat registry done and occupy the flat only after the Builder gets this completion certificate from NA after paying in full - see above the example - Heard from few sources that registry of Omaxe grand woods is stopped because builder has not paid all dues till now.
 
Old July 11 2012, 04:58 PM   #10
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5. Now authority also gave sub-lease options for big plots but it is not mentioned that what if consortium head default but sub-lease person is paying at time or vice-versa

This sub-lease deal is registered on Full Payment of the land portion to NA or it will also follow - 10 year payment plan ? ---> e.g. if anyone have any info on JM Aroma - sub lease Registry(5 acers) in Gardenia Land of Sec-75. Is this - conditional registry like Gardenia based on 10 year payment plan or is the land now fully paid ?
 
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